Rich Formula in Simple Words:- Today we gonna discuss a short summary of rich dad poor dad book written by Robert Kiyosaki. If you read this article then your mind regarding money will be change. This is the way to success in your life. This is the life changing opportunity. 

Rich Formula in Simple words
Formula to become rich

A kind of mind set should always have regarding money which is not taught in our school and how we perceive money and how we define wealth and richness will shape us to how we are going to handle our money. We talk about the life changing book of Robert "Rich Dad Poor Dad". We are sure that this article will definitely change your life. This book provides us the clear meaning of money better than other books. 


Robert Kiyosaki, the author of Rich Dad Poor Dad book tries to clear the money point of view in six ways prom the life of his own biological dad and friend's dad. 


Who is poor dad?

Biological father who was a brilliant professor and have completed PhD. Level of education.  He was doing everything fine in life. Despite of doing all those things on life he did everything what society tell him to do. Like first complete your education, then get a life sustaining job. He was completely trapped inside the circle of society so he was taken as poor dad. 


Who is rich dad?

The father of his friend's who only passed 8th grade in the education system, know the value of money is taken as rich or wealthy dad. When Robert was 9 told that to listen his friend's dad to know the value of money. The value that he have learnt from his rich dad is in the book. He took the advise and insight of rich dad to know about value of money and life.


Lesson of Rich Dad Poor Dad

1. Rich don't work for money but money work for them.

Even an owner of money is sleeping it earning for him. We are not given knowledge about the value of money.

In real life we are taught to study hard. After study apply a good job this will help us to sustain from this salary amount to make a happy life.

When you start earning then it brings expenditure. Increase in income increases expenses. Like you earn 20k then you own motorbike but after increasing salary to 60k you buy Car, go to standard cafe, start buying branded clothes. This is also taken as success in our society.  

Income - expenses = saving in real life. 

Income -Investment =Expenses in rich dad poor dad 

According to rich dad poor dad we should always invest the income then only the difference amount known as saving should be spend. If we bring this thing in discipline then only money will start working for us.


2. Keeping money is far difficult than earning money.

We cannot keep our money consistently than earning money from job.

Like, a poor man won a lottery of huge amount which make you wealthy for sometime but after certain time he again become poor.

Popular celebrity makes who earns money in at the time of popularity. But they could not save or invest this money in right way which makes them poor.


Assets and Liabilities

Firstly, assets means anything that brings money to your pocket. Liabilities means anything that take away money from your pocket. 

Everyone tell to buy home, vehicle and luxury item after becoming successful. Those who work on salary buy depreciating  assets  like home, vehicles on loan which become liability. If you want to sell it immediately will not appreciate but within a moment the value decrease.

Another is you purchased an iPhone 14 max pro. You don't like the phone then you do not get your money equal to purchase price. There is huge drop in price while selling. This shows that you spend lots of money on such luxurious items.

Among us those who can spend money in such item is taken as rich and successful person.

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But this thing is opposite than above thinking because those person who are buying vehicle are drowned in huge loan. Such person are poor in reality. But if you can afford to buy vehicle without loan and let out then you are rich because you earn from that vehicle after investment. Always buy appreciating assets not liabilities.

 Appreciating Assets

  1. Stocks
  2. Gold biscuits
  3. Real States
  4. Land


Poor Salaried Person Balance Sheet

If we look at the normal person or salaried employee balance sheet. Also, known as poor person because he always struggle to earn money but never reach to his destination. 


  1. Salary



  1. Taxes
  2. Mortgage payment
  3. Vehicle payment
  4. Home Expenses


There is nothing in assets side



  1. Mortgage Loan
  2. Credit card debt
  3. School Loan

From the above we could conclude that poor person are without assets but lots of loan.


Rich Salaried Person Balance Sheet

If we look at the rich person or salaried employee or investor balance sheet. Also, known as rich person because he/she has an ability to increase money.


  1. Salary
  2. Dividend
  3. Interest
  4. Rent
  5. Royalties


  1. Taxes
  2. Mortgage Payment



  1. Real State
  2. Stock
  3. Noted
  4. Bond 
  5. Intellectual Property


  1. Mortgage loan
  2. Credit card debt
  3. Consumer losses


Rich person always Increase the size of assets rather than liabilities. This also makes you financially free.


3. Mind your own business with job

You should always understand you business or job. Side by side you should able to do business related to job on part time basis. You should able to generate side income to support job. Those who are involve on business should understand the nature of business. Always start a complementing business. Like Mc Donald is a burger selling company but its side business is real state business. Also, multiplex cinema hall more from confectionery items like popcorn, cokes are more than ticket amount.


4. Know your taxes

Reach people always try to pay low tax to the government in legal way. Like a salaried employee can do insurance of certain amount which decrease the tax amount to government. Don't just depend on job but start business which decreases the tax amount. In Nepal 36 percent tax on income is for salaried employee and for business only 20 percent of profit(Sales-expenses=profit). Always try to know about allowable deduction if you are salaried employee. Rich people pay very less tax amount. Take your some time to research. So figure out how you can do this things.


5. Rich find way to invent money

People think about earning money from the place where there is no money or bringing new goods and services in the market to earn money. Like, videos from book. You should always try to use your expertise and add your value in goods and services and launch in the market to earn.


6. Rich people always learn and sell the idea

Rich people learn from friend circle, business circle, listening to others, reading books. Constantly learn and do research, learn how it works. You should always observe and react on anything. You should always invest time and money for research and learning. Don't compete with others bout yourself. This is the right way to become rich.


Last Words

If you like this article then don't forget to share with friends. Hope to know that you have implemented this formula to become rich in your life. 

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